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How costs add up over a lifetime

Loan interest, one household's working life, and the calculations behind them. Each number says where it comes from.

Interest, in every country

On a 30 year home loan, for every 100 you borrow, you pay this much in interest:

At 6%, you pay more in interest than you borrowed. At 12%, 2.7 times as much.

Rates are different in every country. The arithmetic is the same. CTMP is designed to run with no debt, so none of this is in its prices.

Monthly payment = loan × r / (1 - (1 + r)-360), where r is the yearly rate divided by 12. Interest = monthly payment × 360, less the loan.

Equal monthly payments over 30 years. Arithmetic, not a forecast.

One working life, added up

One typical US household and 40 years of work. The US is shown because its numbers are published. The same layers are in prices everywhere.

  • Earned over 40 years$3,360,000About $84,000 a year, the US median household income.
  • Taxes$672,000Roads, schools, courts. Not counted as extra here.
  • Five basics$2,405,000Home $1,000,000. Cars and getting around $300,000. Food $475,000. Power, water and phone $230,000. Health care $400,000.
  • Left for everything else$283,000About $590 a month.

Inside the $2,405,000

  • Stacked on top$1,010,000Interest $650,000. Profit $225,000. Rent and land $135,000.
  • Layers in between$594,000Moving, selling, insurance, paperwork, ads. Part of it pays people for their work. Part of it is margin.
  • The things themselves$801,000The materials, the work of building and making, the farm, the care.

About $1 million is stacked on top. The biggest piece is interest on the home loan: about half a million dollars, more than the price of the house.

Money is time

The same $3,360,000, as 40 years of work.

  • Taxes
  • Stacked on top
  • Layers in between
  • The things themselves
  • Left

Of 40 working years, about 12 pay for what is stacked on top. The range for interest alone moves this between 11.4 and 12.6 years. Profit and rent have no published range, so the real range is wider.

Each amount as a share of $3,360,000, times 40 years: 8.0, 12.0, 7.1, 9.5 and 3.4, which add up to 40.

How the numbers fit together

The $2,405,000 comes from The Rigged Life, Part 1, which sorts spending by what you buy. The $1,010,000 comes from Part 2, which sorts the same spending by who gets paid. They were estimated separately. These three steps make them add up to the same total.

  1. The land is counted once. Part 1 counts the land under the home ($60,000 to $80,000, so $70,000 here) as part of the things themselves. Part 2 counts it as rent. Here it is counted once, with rent and land. $871,000 less $70,000 is $801,000.
  2. The layers in between are what is left. $2,405,000 less $1,010,000 less $801,000 is $594,000. Part 2's own estimate for these layers was $550,000, which is $44,000 less. Because this line is a remainder, it also takes in any overlap the two articles still share.
  3. What is left is not rounded. $3,360,000 less 20% tax is $2,688,000. Less $2,405,000 of basics is $283,000. Part 1 rounds this to $290,000.
Taxes$672,000 Stacked on top$1,010,000 Layers in between$594,000 The things themselves$801,000 Left$283,000 Earned over 40 years$3,360,000

The parts add up to the total. That does not prove nothing is counted twice. Interest and profit inside the price of materials, for example, could sit in both "the things themselves" and "stacked on top". If so, one of those two is too high, and the layers in between too low, by the same amount.

What is arithmetic and what is an estimate

  • ArithmeticThe interest per 100 borrowed. The home loan interest: $415,200 at 6.2% over 30 years, borrowed in full, is $500,300 of interest. The years, as shares of 40.
  • EstimatesInterest is $600,000 to $700,000: the home loan $450,000 to $500,000, car loans about $35,000, credit cards about $15,000, and interest inside the prices of everything else $100,000 to $150,000. That range alone moves stacked on top between $960,000 and $1,060,000, or 11.4 to 12.6 working years. Profit ($225,000) and rent and land ($135,000) are single estimates from The Rigged Life, Part 2, with no range given, so the full range is wider than this.
  • One household, one countryUS figures are used because they are published. Interest rates, prices and taxes are different in every country. The interest table at the top works for any rate.

Sources

  • US Census Bureau, median household income, 2024: $83,730, rounded here to $84,000.
  • Bureau of Labor Statistics, Consumer Expenditure Survey, 2023.
  • National Association of Realtors, median existing home price: $415,200.
  • Freddie Mac, Primary Mortgage Market Survey, 30 year fixed rate: about 6.2%.
  • National Association of Home Builders, construction and land shares of a new home's price.
  • Cox Automotive, new vehicle prices. Fidelity, health care costs in retirement.
  • Chris M Coode (CTMP), The Rigged Life, Parts 1 and 2, December 2025.
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